M1 Money Supply
From October 2019 to May 2020, the M1 grew from 3.9345 to 5.063 trillion dollars, a 28.68% increase.
The COVID19 stimulus took several forms, some as direct distribution through the IRS. That direct distribution at least went to the buy side of the market. Treasure’s repurchase of bonds, however, flooded the investment market with liquidity. The stock market response is obvious. Given an unchanged valuation of equities, their diluted-dollar value continues higher and will continue to do so as long as credit easing continues.
Estimated GDP2020 20.140 trillion, divided by M1 5.063 = velocity or turnover rate of only 3.98. So, despite the liquidity in the stock market, the economy is turning over at a very sluggish rate.
The COVID19 stimulus took several forms, some as direct distribution through the IRS. That direct distribution at least went to the buy side of the market. Treasure’s repurchase of bonds, however, flooded the investment market with liquidity. The stock market response is obvious. Given an unchanged valuation of equities, their diluted-dollar value continues higher and will continue to do so as long as credit easing continues.
Estimated GDP2020 20.140 trillion, divided by M1 5.063 = velocity or turnover rate of only 3.98. So, despite the liquidity in the stock market, the economy is turning over at a very sluggish rate.
posted by Clancy Hughes | 7/10/2020 09:42:00 AM
0 Comments:
Post a Comment
<< Home